- USDTHB: moving in the range 33.70-33.78 this morning supportive level at 33.60 resistance level at 33.80
- SET Index: 1,427.6 (+1.65%), 6 Sep 2024
- S&P 500 Index: 5,408.4 (-1.7%), 6 Sep 2024
- Thai 10-year government bond yield (interpolated): 2.546 (-0.72 bps), 6 Sep 2024
- US 10-year treasury yield: 3.72 (-1.0 bps), 6 Sep 2024
- US hiring falls short, signaling potential concerns for the Fed
- Fed's Williams and Waller support a 25-bps rate cut
- German industrial output slump sparks recession fear
- Dollar ticks up after mixed August U.S. payrolls
US hiring falls short, signaling potential concerns for the Fed
Nonfarm payrolls for last month totaled 142,000, an improvement over the sharply revised 89,000 for July. Economists had projected 164,000, up from the initial July estimate of 114,000. The unemployment rate edged down to 4.2% from 4.3%, meeting expectations, while the labor force participation rate held steady at 62.7%. This report is important for guiding the Federal Reserve's decision on the magnitude of a potential rate cut at the September 18th meeting. However, it did not offer a definitive signal, as the numbers were not weak enough to make a 50-basis point cut the most likely scenario, but they were not strong enough to eliminate speculation about a larger cut.
Fed's Williams and Waller support a 25-bps rate cut
Fed's Williams is willing to start rate cuts and adjust monetary policy to a neutral stance depending on the data. He emphasized that the Fed will use data to inform decisions about rate cuts without committing to a particular amount. Additionally, he mentioned that monetary policy is "well positioned" and "on track" to prevent undesirable weaknesses in the labor market. Meanwhile, Fed's Waller suggests that reducing the policy rate at the upcoming meeting could help sustain economic momentum. He supports the idea of implementing rate cuts early if necessary but observes that recent data indicates the labor market is softening rather than deteriorating, which will be important for policy decisions.
German industrial output slump sparks recession fear
German industrial production dropped more than anticipated in July, largely due to a downturn in the automotive sector, raising concerns that Europe's largest economy might shrink once more in the third quarter. Production fell by 2.4% from the previous month, whereas analysts had forecasted a 0.3% decline. The automotive sector alone saw an 8.1% drop, heavily impacting the overall figures. Over a less volatile three-month period, production decreased by 2.7% from May-July compared to the February-April period.
Dollar ticks up after mixed August U.S. payrolls
The 10-year government bond yield (interpolated) on the previous trading day was 2.546, -0.72 bps. The benchmark government bond yield (LB346A) was 2.545, -1.00 bps. Meantime, the latest closed US 10-year bond yields was 3.72, -1.0 bps. USDTHB on the previous trading day closed around 33.54 moving in a range of 33.70 – 33.78 this morning. USDTHB could be closed between 33.60 - 33.80 today. At the end of the week, the dollar experienced some fluctuations but ultimately closed with gains, supported by a risk-averse mood and a lack of strong support from Federal Reserve officials for a 50bps cut, despite an initial drop following the US jobs report. The euro, on the other hand, faced losses, with EUR/USD largely influenced by movements in the dollar. Weak German industrial output and the appointment of Barnier as French PM had minimal impact on the euro. After the post-NFP USD sell-off, EUR/USD reached a high of 1.1155 before retreating to around 1.10 as the dollar recovered. The Japanese yen was the standout performer among G10 currencies, gaining against the greenback due to declining US Treasury yields and weaker equity markets. Similar to the dollar, USD/JPY saw volatility following the US jobs report, but by the afternoon, the yen strengthened, driving the cross to a low of 141.79.
Sources : ttb analytics , Bloomberg, CNBC, Trading economics,
Investing, CEIC
